In German e-commerce, there are online-shops that are thriving despite Amazon's growing market share in Germany. What can you learn from these companies? We took a close look at their success factors.
In the list of the 100 best-selling German B2C online shops, based on the "E-Commerce Market Germany 2017" study, well-known retailer brands rank behind Amazon: Otto and Tchibo as generalists, the clothing retailers Zalando, Bonprix and H&M, as well as MediaMarkt, Conrad and Notebooksbilliger for consumer electronics.
These are names for which it does not seem surprising at first that they persist in the online trade. Some can look back on a long tradition as mail-order catalog companies, while others have a strong foothold in stationary retailing. As a result, they already had existing customer access and market awareness. But some have also managed to make a name for themselves through intensive and aggressive marketing with large sums of investment.
In addition to these giants, however, there are also a large number of less known online retailers whose sales nevertheless rank in the top 100. There are, for example, family businesses such as Thomann, the world's best-selling music retailer, or specialists such as Zooplus, a pet supplies retailer.
These retailers, who are rather unknown to the general public, are also established players. Just like the big players, they obviously do a lot right. Because the online customer, who is considered to be less loyal and highly demanding, likes to spend his money there.
But what exactly can we learn from this?
We have filtered out 5 success factors for you.
5 success factors of the largest German
1. Good service - the most important satisfaction factor
According to the PwC Future of Customer Experience Survey 2017/18, friendly and knowledgeable service is not only perceived as very important by clients in their shopping experience, but they are also willing to accept higher prices for it.
For a high service quality you and your company should be permanently available. In addition, your service staff should be trained and always friendly. In this way you can put a smile on the face of your customers, even if in case a problem occurs.
According to the study "Success factors in e-commerce", a good and easy-to-reach service is still the top priority for customers. This study is published annually by the ECC Cologne and the agency dotSource. It says, that service satisfaction is the biggest adjusting screw for customer loyalty. This includes friendly and competent contact persons, a fast reaction time as well as an extensive service area in the online-shop.
In this respect, Zooplus is far ahead in customer favor. At the German Online Trade Award 2017, the Munich-based company secured the title of overall winner. The website provides visitors with tips about pets that are designed as infotainment, such as the "veterinarian question of the day".
Likewise, the company Thomann occupies a top position. If you call, you will receive a consultation with a specialist about music instruments, sound or stage technology. Because the employees are experts like sound technicians, stage technicians or musicians, who know the products personally. This very personal contact is an important factor in service. According to the PWC survey (see above), 84% of Germans would like to interact more with real people, while technology continues to develop, and simple things can be solved automatically.
At Thomann, more than 50 employees check the quality and correctness of the goods before shipping. This high service quality is reflected in a sensationally low return rate of around 10 percent for online retailers.
2. Delivery time - the most important closing criterion after price
For most German online customers, price is still the deciding factor. But right behind them is fast and punctual delivery, as several studies have shown. After delivery costs that are too high, a delivery time that is too long is the second most frequent reason why orders fail due to delivery modalities.
Fast and above all punctual delivery is a must for every online retailer. It is also important that the parcels arrive undamaged and that the goods arrive fully functional at the customer's premises.
Therefore, it is standard for all large shops - from Otto to Tchibo - to display the estimated delivery time of an article immediately and close to the price. If available, the customer can also see other delivery options such as express delivery. A customer in a hurry is quite willing to pay for a faster delivery, if he can save himself the search for alternative shopping options.
Large German e-commerce companies are responding with offers such as Zalando Plus or Otto Up in order to offer customers faster delivery times and other exclusive benefits for a subscription fee. Participants of these offers can look forward, after the American model, to deliveries on the same day or permanently free shipping.
3. Check please: payment as easy as possible
Anyone who has decided on an item wants to complete the purchase quickly. That's why good online-shops avoid any unnecessary click when it comes to the check out. In addition, the number of necessary steps is usually displayed above (e.g. step 1 of 3 or similar).
You should make it as easy as possible for the customer. Your shop should therefore be fully accessible on every device and the payment process should be fast, uncomplicated and clear.
The payment method also plays a decisive role for users. Many prospective buyers leave online shops, because payment is not easy enough or their preferred payment method is not available. According to another study by the ECC Cologne, Germans love ordering on account or paying via PayPal. This is followed by direct debit, credit card and instant bank transfer. Overall, the trend is towards "payment diversity". On average, 6 payment methods are offered. Registered users should also be able to save the payment methods, e.g. to avoid having to re-enter credit card data.
The payment process in the shop should therefore be fast, uncomplicated and clear on every device. Especially on mobile devices all important elements should be directly visible. The worst thing that can happen to you is an "order now" button that is cut off or hard to find! This would cause you to lose important sales.
4. Sell on all channels
It is no longer a secret that shopping behavior has changed. Even for traditional retail companies, this means one thing above all: reacting! Otto, for example, is the online retailer with the highest revenue based in Germany and has a comparatively older target group between 30 and 55 years due to its roots in catalogue mail order.
Nevertheless, every second visitor already comes to the shop via smartphone or tablet and every third euro of revenue comes from mobile. Mobile devices now dominate e-commerce. Therefore, it is vital for all successful shops to develop a multi- and/or omni-channel strategy. In essence, this means being present on as many devices and platforms as possible that are relevant to the target group. It is important that the advantages and peculiarities of each channel are used effectively. This enables you to offer your customers a consistent shopping experience everywhere.
You should be present on as many devices and platforms as possible that are relevant to the target group. However, it is important to use the advantages of the channels effectively.
Furthermore, 58 percent of consumers were already buying via apps, according to a comScore study in 2016. In 2013 it was only 42 percent. Smartphone owners use their device 70 to 150 times a day. This offers retailers a lot of potential for communicating with their customers! It has been proven that retailers have more repeat purchases, if they are present with an app on this device.
Apps not only tie the customers. While a shop primarily covers the demand, a sophisticated app creates the demand. It can actively address customers with special and daily offer messages or remind them that consumable supplies such as coffee could run out. This also gives you the opportunity to use push messages to address and inform customers in a very targeted manner. For this reason, every large online shop usually has an app for the most important devices.
5. Create a pleasant shopping experience
Last but not least, all successful online retailers succeed in giving their customers a good shopping experience. In addition to good service and speedy checkout, this also includes "reading the customer's wishes from his eyes" in the metaphorical sense. In online trading, this means tailoring the product list and all variable shop elements to the visitor.
The customer's purchase history can serve as the basis for this, from which, among other things, the demand for consumables - whether printing ink, cat food or furniture polish - can be derived. However, situational data such as time of day, weekday, device or referrer can also be used for individual sorting of e.g. product lists. Thus, the shop can be automatically adapted for each individual user based on his shopping situation. (so-called "situationalization").
Example: Situationalization of product lists of an online shop.
While delivery times in large cities have already shrunk to a few hours, there is still a lot of room for improvement in shop personalization. The experience of retailers - with customer segmentation, for example - suggests that personalization contributes a great deal to customer loyalty and sales growth. For this reason, the major German e-commerce giants rely intensively on big data analyses for the display of products on start pages, in product lists or categories and in recommendations. The goal is a user-individual personalization in real time! In the coming years, retailers will be able to secure a disproportionate share of the growing e-commerce cake by means of situation-aware personalization.